Tips, Tricks, & Titillating Tid-Bits

tipsTwice a month, our Controller shares important tips, interesting information, or accounting trivia with you in our blog. Some posts will be educational, others will be entertaining; all will be enjoyable. For instance … bookkeeper is the only word in the English language that has three consecutive sets of double letters. That makes a bookkeeper pretty special! Please check out our Blogs page for more information.

Following is a list of historical dates you may find interesting …

1447 Fra Luca Bartolomeo de Pacioli was born in Tuscany. He is referred to as “The Father of Accounting and Bookkeeping” and he was the first person to publish a work on the double-entry system of book-keeping.
April 15, 1452 Leonardo da Vinci was born. He is revered for his technological ingenuity. He conceptualized, among other items, an adding machine. He studied mathematics with Luca Paicioli.
February 27, 1472 Banca Monte dei Paschi de Siena, the oldest surviving bank in the world is founded.
November 10, 1494 “Summa de Arithmetica, Geometria, Proportioni et Proportionalita” (Everything About Arithmetic, Geometry and Proportion) by Luca Paicioli was published in Venice. This book was intended as a school textbook, and was a comprehensive collection of mathematical knowledge as it stood at the time. It is notable for being the first printed work to contain an Italian-language description of algebra and for describing a system of double-entry book-keeping. Paciolo also detailed the correct methods for using ledgers and added a caution that nobody should end his working day unless he had made his debit and credit columns agree. The book also covers other topics such as the ethics of accounting, as well as the Rule of 72, a method of determining economic returns.
March 20, 1602 First Stock exchange, The Amsterdam Stock Exchange opens for business
December 25, 1642 Isaac Newton was born. He shares credit with Gottfried Wilhelm Leibniz for the development of calculus.
1717 England adopted a de facto gold standard in 1717 after the master of the mint, Sir Isaac Newton, overvalued the guinea in terms of silver.
December 16, 1773 Boston Tea Party was a political protest by the Sons of Liberty in defiance of the Tea Act which they believed violated their rights to “No taxation without representation”.
1785 The United States adopted a silver standard based on the “Spanish milled dollar”
1787 The United States Constitution established gold and silver as the legal tender of the United States at a floating exchange rate.
April 2, 1792 Coinage (Mint) Act of 1792 was passed by the US Congress. It established the United States Mint and regulated the coinage of the United States. This act established the silver dollar as the unit of money in the United States, declared it to be lawful tender, and created a decimal system for US currency. That same act of legislation also specified that $10, $5 and $2.50 coins (known as eagles, half-eagles and quarter-eagles) were to be made of their face value in gold, while dollar, half-dollar, quarter-dollar, dime and half-dime coins were to be made of their value in silver. (Cent and half-cent coins were made of cheaper copper.) But a problem soon arose, after would-be criminals saw they could make a good profit by filing shavings from the sides of gold and silver coins and selling the precious metal. Before the 18th-century was out, the U.S. Mint began adding ridges to the coins’ edges, a process called “reeding,” in order to make it impossible to shave them down without the result being obvious. As a side benefit, the reeded edges also made coin design more intricate and counterfeiting more difficult.
1794 The first US Silver Dollars were struck
1817 Jean-Baptiste Payen related accounting systems at a carriage manufactory and a glue factory that resembles job order and process costing.
April 17, 1837 JP Morgan was born. He was an American Financier and banker who dominated corporate finance and industrial consolidation.
Juy 8, 1839 John D Rockefeller was born. Rockefeller created the first American monopoly (Standard Oil). This led to Congress passing the Sherman Antitrust Act in 1890.
1854 Zerah Colburn’s Railroad Advocate urged the recognition of depreciation by “setting aside sums each year to cover the replacement.”
August 5, 1861 Revenue Act of 1861 was passed which included a tax on personal incomes to help pay war expenses. This tax was repealed ten years later.
1862 Paper money was made legal tender. It was a fiat money (not convertible on demand at a fixed rate into specie). These notes came to be called “greenbacks”.
September 24, 1869 The Black Friday crash was caused when Jay Gould and James Fisk attempted to corner the gold market on the New York stock exchange.
February 12, 1873 Coinage (Mint) Act of 1873 was signed by President Ulysses S Grant. It was a general revision of the laws relating to the Mint of the United States, ending bimetallism in the United States, placing the nation firmly on the gold standard.
November 22, 1881 The Bookkeeper, a New York magazine, proposes that there should be a law requiring pubic companies to keep accurate accounting records.
July 28, 1882 Institue of Accountants and Bookkeepers was founded; one of the earliest recorded efforts to establish the accounting profession in the United States.
1887 The American Association of Public Accountants (AAPA) is created. As early as 1884, issued certificates to members who passed an examination.
1887 The comptometer was the first commercially successful key-driven mechanical calculator, patented in the USA by Dorr E. Felt.
April 17, 1896 The first law establishing the CPA designation was passed in New York. The title C.P.A. was to be obtained by professional examination administered by New York University.
August 25, 1888 William Seward Burroughs received a patent for his adding machine.
December 21, 1899 Christine Ross becomes the first female CPA.
1902 The Federation of Societies of Public Accountants was formed in the U.S.
November 19, 1904 The United States adopted a silver standard based on the Spanish milled dollar.
May 25, 1905 The Financial Accounting Standards Board (FASB) is the designated organization in the private sector for establishing standards of financial accounting that govern the preparation of financial reports by nongovernmental entities.
1910 The average life expectancy for men was 47 years. Only 14 percent of the homes had a bathtub. Only 8 percent of the homes had a telephone. There were only 8,000 cars and only 144 miles of paved roads. The maximum speed limit in most cities was 10 mph. The average U.S. wage was 22 cents per hour. The average U.S. worker made between $200 and $400 per year. A competent accountant could expect to earn $2000 per year (That’s about $48,544 in 2012 dollars). More than 95 percent of all births took place at home. Ninety percent of all Doctors had no college education. Instead, they attended so-called medical schools, many of which were condemned in the press and the government as ‘substandard.’ Sugar cost four cents a pound. Eggs were fourteen cents a dozen. Coffee was fifteen cents a pound. Most women only washed their hair once a month, and used Borax or egg yolks for shampoo. The five leading causes of death were: 1. Pneumonia and influenza, 2. Tuberculosis, 3. Diarrhea, 4. Heart disease, 5. Stroke. The American flag had 45 stars. The population of Las Vegas, Nevada was only 30. Crossword puzzles, canned beer, and iced tea hadn’t been invented. There was no Mother’s Day or Father’s Day. Two out of every 10 adults couldn’t read or write and only 6 percent of all Americans had graduated from high school. Marijuana, heroin, and morphine were all available over the counter at the local corner drugstores. Back then pharmacists said, ‘Heroin clears the complexion, gives buoyancy to the mind, regulates the stomach and bowels, and is, in fact, a perfect guardian of health’. Eighteen percent of households had at least one full-time servant or domestic help. There were about 230 reported murders in the U.S. (Source unknown).
November 1910 The Jekyll Island conference was dodgy even by the standards of the Gilded Age: a self-selected handful of plutocrats secretly meeting at a private resort island to draw up a new framework for the nation’s banking system. The group’s original plan wasn’t ratified by Congress, but one very much like it was adopted and became the basis of the Federal Reserve system that remains in place today.
December 23, 1913 The Federal Reserve banking system is created.
February 3, 1913 The 16th Amendment is ratified permitting federal income tax.
March 1, 1914 The FTC shockingly announces a proposal for audit procedures and fee schedule for auditors promulgated by the government.
September 26, 1914 The Federal Trade Commission and General Accounting Office are created.
1916 The AAPA changes its name to the American Institute of Accountants (AIA).
1917 The AIA approves eight rules of professional conduct and provides state boards with a written test for accountants. An AIA project named “Uniform Accounting” was published in the Federal Reserve Bulletin – provided authoritative guidance related to the income statement. The first AIA examination is given.
1919 The National Association of Cost Accountants is formed in Buffalo, New York and the first issue of the National Association of Cost Accountants Official Publications is published.
1922 The AIA bans contingent fees and most advertising by public accountants and their firms. The ban on advertising lasted until 1978.
October 24 1929 US Stock market crash
April 5, 1933 Executive Order 6102 signed by President Franklin D. Roosevelt “forbidding the Hoarding of gold coin, gold bullion, and gold certificates within the continental United States”. The effect of the order, in conjunction with the statute under which it was issued, was to criminalize the possession of monetary gold by any individual, partnership, association or corporation.
June 6, 1934 Securites Exchange Act of 1934 becomes law. With this Act, Congress created the Securities and Exchange Commission. The Act empowers the SEC with broad authority over all aspects of the securities industry.
August 14, 1935 The Social Security Act was enacted establishing payroll deductions by employer and employee.
1936 First use of the phrase “generally accepted accounting principles” appears in an AIA report “Examination of Financial Statements”.
December 31, 1937 McKesson and Robbins lie to auditors and fraudulently inflate inventory and accounts receivable figures by more than 20%.  The case resulted in Statements on Audit procedures 1, “Extensions of Audit Procedures”, and required auditors to observe inventory and confirm receivables.
June 28, 1938 The Fair Labor Standards Act established the forty-hour week and the minimum wage at $0.25 per hour. The act banned child labor and required detailed payroll records be kept for five years.
1943 The U.S. begins income tax withholding.
July 1, 1944 The Bretton Woods Conference, formally known as the United Nations Monetary and Financial Conference, was the gathering of 730 delegates from all 44 Allied nations at the Mount Washington Hotel, situated in Bretton Woods, New Hampshire, to regulate the international monetary and financial order after the conclusion of World War II.
1960 KISS principle noted by the US Navy. The KISS principle states that most systems work best if they are kept simple rather than made complicated; therefore simplicity should be a key goal in design and unnecessary complexity should be avoided. The phrase has been associated with aircraft engineer Kelly Johnson (1910–1990).
June 24, 1968 President Richard Nixon announced that the United States would no longer redeem currency for gold or any other precious metal, forming the final step in abandoning the gold and silver standards. This announcement was part of the economic measures now known as the “Nixon Shock”.
February 18, 1971 First pocket calculator introduced by Japanese company Busicom.
May 5, 1972 Dennis R Beresford was born. He was the longest serving Chairman of the Financial Accounting Standards Board (FASB) serving from January 1987 through June 1997.
June 1, 1973 The International Accounting Standards Committee was founded. It was responsible for developing the Internation Accounting Standards and promoting the use and application of these standards.
September 2, 1974 President Gerald R Ford signs the Employee Retirement Income Security Act expanding the opportunities for accountants to practice in the area of employee benefit plan audits
December 19, 1977 The Foreign Corrupt Practices Act of 1977 was passed. It is a federal law known primarily for two of its main provisions, one that addresses accounting transparency requirements under the Securities Exchange Act of 1934 and another concerning bribery of foreign officials.
January 1, 1981 The first certified public accountant firm Coopers and Lybrand was established in Shanghai.
April 1, 1985 First accounting software, TurboCash was released.
October 19, 1987 Black Monday, Global stock markets crash starting in Hong Kong, then Europe and then the US.
July 8, 1999 A class action lawsuit was filed against Waste Management and its officers for issuing false statements and had to restate financial statements from 1992-1997.  Arthur Anderson is fined $7 million for being the Auditors of the Houston based Waste Management Company who reported $1.7 billion in fake earnings to the public.
October 1, 1999 4000 year old Sumerian clay tablets are translated and contain the oldest known tax records.
April 1, 2001 The International Accounting Standards Board was founded as the successor to the International Accounting Standards Committee.
August 16, 2001 Sherron Watkins writes the letter to Ken Lay at Enron expressing concern over the accounting practices. In October the SEC opens its investigation into the Enron limited partnerships. In November, Enron informs the public that they have overstated profits by $586 million over the past 5 years. On December 2, 2001, Enron Files for bankruptcy protection in New York.
March 11, 2002 WorldCom announces that the SEC is investigating accounting practices and loans to top executives. In June, WorldCom announces that it underreported expenses by $3.8 billion. In August, CFO Scott Sullivan is indicted on charges of making false SEC filings to deceive investors and inflate WorldCom earnings.
July 30, 2002 The Sarbanes-Oxley Act (SOX) passed by the U.S. Congress to protect shareholders and the general public from accounting errors and fraudulent practices in the enterprise, as well as improve the accuracy of corporate disclosures.
July 14, 2009 Bernie Madoff begins serving a 150 year sentence for stealing $64.8 billion through the largest Ponzi scheme in history.
April 4, 2016 Square Root Day (The next one is May 5, 2025)